* U.S. crude stocks draw down for second week in row
* Brent closes above $50 a barrel for first time in 7 months
* OPEC meeting diluted by no output cap; Saudis pledge no
ramp up
(Recasts, adds settlement prices and Brent's milestone)
By Barani Krishnan
NEW YORK, June 2 (Reuters) - Oil prices edged higher on
Thursday, with Brent settling above $50 a barrel the first time
in seven months, after the latest drawdown in U.S. crude
stockpiles offset OPEC's failure to set a ceiling for its
output.
U.S. crude stockpiles fell 1.4 million barrels last week,
drawing for a second straight week, data from the Energy
Information Administration showed. Although lower than a 2.5
million-barrel draw forecast by analysts, the decline helped
crude futures reverse early losses. EIA/S
U.S. West Texas Intermediate (WTI) crude futures CLc1
settled up 16 cents, or 0.3 percent, at $49.17 a barrel. It had
tumbled more than $1 earlier.
Brent futures LCOc1 rose 32 cents, or 0.6 percent, to
settle at $50.04, after peaking at $50.30. It was its first
settlement above $50 since Nov. 3.
"It was more a definitive day for the EIA than OPEC," said
Carl Larry, director of business development for oil & gas at
Frost & Sullivan in New York. "Leaving aside the crude draw, the
demand numbers for U.S. gasoline and diesel were a bit too large
to ignore."
U.S. gasoline stockpiles USOILG=ECI fell by 1.5 million
barrels, compared with expectations for a 157,000-barrel drop,
the EIA data showed. Inventories of distillates USOILD=ECI ,
which includes diesel and heating oil, fell by 1.3 million
barrels, versus a forecast 891,000 barrels.
Brent and WTI had largely traded in a $3-$5 range below $50
for weeks due to uncertainty over oil demand and strong
technical resistance for crude at above $50.
Crude futures have gained more than 80 percent from this
year's lows as supply outages in Canada, Venezuela, Libya and
Nigeria eased a two-year long glut. Still, analysts said, the
key to real recovery was balancing supply-demand from the
biggest producers, which include OPEC.
Thus, Thursday's meeting of the Organization of the
Petroleum Exporting Countries in Vienna was closely watched for
signs it may revive OPEC's group output ceiling, as proposed by
Saudi Arabia, or introduce individual member production quotas,
as suggested by Iran.
OPEC did neither.
Saudi's new Energy Minister Khalid al-Falih instead promised
the kingdom would not flood the market with extra oil. His
remarks suggested a softening of Riyadh's previous stance, when
it rigorously pumped to defend its share of a crude market
oversupplied by around 1.5-2.0 million barrels per day.
Iran maintained its right to steeply raise crude exports to
pre-sanction levels, although Oil Minister Bijan Zanganeh said
he didn't think others in OPEC would ramp up supply.